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Author: Watty56 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75664  
Subject: Re: IRAs & RMDs Date: 12/23/2010 10:14 AM
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Part of the worry about RMDs is that some poeple try to use IRA's for estate planning and there are a number of possible pitfalles with this.

I have occasionally commented that just like the kids who at the mythical Lake Woebegone who are "all above average", fewer people will have problems with excessive RMDs than worry about it now.

It would be interesting if you could look up the safe withdrawal rate at various ages to see when or if the RMD percent would be higher than the safe withdrawal rate.

One thing to keep in mind though is that if you are getting social security then the withdrawals from an IRA could cause more of your social security to be taxable too which would result in a much higher effective marginal tax bracket until you get to the point where all of your social security is taxed. For a good explanation of how social security is taxed see this link;

http://www.bogleheads.org/wiki/Taxation_of_Social_Security_b...

Currently withdrawals from a Roth do not cause more social security to be taxable.

Another thing is that it wasn't clear if your example was for a joint return which would have a lower joint RMD and the lower married filing jointly tax rates. If it was, you really need to calculate the numbers for both a couple and a surviving spouse since after one person dies, the survivor could be in a higher tax bracket and be required to take a larger RMD.


Greg
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